*from www.bloomberg.com, April 1, 2013 (To view original article click here.)
Take Away #1: Investors are boosting wagers on higher commodity prices on signs that the U.S. is accelerating and Europe’s debt crisis is easing.
Key Facts and Figures:
- These bullish bets come at the fastest pace in nearly four years, rebounding from the least bullish position since 2009.
- Hedge funds and other large speculators increased net-long positions across 18 U.S. futures and options by 10% to 679,191 contracts in the week ended March 26.
- The bets surged 67% in three weeks, the biggest advance since May 2009.
- Wagers on higher oil prices climbed the most this year, while those for cattle are at a six-week high.
- The S&P GSCI Spot Index of 24 raw materials has rebounded 2.3% from a 10-week low on March 4.
- Contracts outstanding jumped 10% last quarter, the most in a year.
- The U.S. economy grew at a faster pace than previously estimated in the fourth quarter, said the Commerce Dept. on March 28.
- Cypriot president Nicos Anastasiades vowed to keep his nation in the euro on March 29 after it became the fifth country to seek a rescue since the region’s crisis began in 2009.
Take Away #2: American spending increased and the Cyprus government averts panic withdrawals.
Key Facts and Figures:
- The S&P GSCI gauge gained 1.3% last quarter.
- The MSCI All-Country World Index of Equities climbed 6%.
- The dollar advanced 4% against a basket of six trading partners.
- Treasuries lost 0.3%.
- The CFTC holdings reached a four-year low in the first week of March and are still about 24% below the average over the past five years.
- U.S. GDP rose at a 0.4% annual rate in the fourth quarter, up from a prior estimate of 0.1%.
- American household purchases gained 0.7% in February after a 0.4% advance the prior month was bigger than previously estimated.
- The U.S. is the biggest consumer of corn and crude oil.
- The Cyprus government averted panic withdrawals last week when it allowed banks to open for the first time since March 16.
- Retail sales in Germany, Europe’s largest economy, unexpectedly rose for a second month in February.
- Western Europe will use 14% of the world’s copper this year, and the U.S. will account for 8,7% of demand.
Take Away #3: The GSCI gauge has surged more than 80% since the end of 2008 as central banks in Europe and Asia started record global stimulus measures aimed at reviving economies.
Key Facts and Figures:
- The Federal Reserve left its asset purchases unchanged at $85 billion a month on March 20.
- The S&P 500 Index advanced to a record last week, marking the completion of the recovery from a bear market that wiped out more than $10 trillion form the value of U.S. equities.
- Commodities have failed to keep up with the equity rally as four years of price gains prompted farmers and miners to increase production.
- The GSCI is still 27% below its record close in July 2008.
- Production will outpace demand in aluminum , copper, lead, nickel, and zinc in 2013, according to Barclays.
- Cotton and sugar will also see surpluses, according to Rabobank International.
- U.S. crude stockpiles reached the highest since June in the week ended March 22.
- American growers will plant the most corn since 1936, said the U.S. Dept. of Agriculture.
Take Away #4: Added capacity across the board suggests we won’t see a lot of push on pricing.
Key Facts and Figures:
- There’s additional acreage in farmland and some of the drought conditions in the southern hemisphere have eased, says Peter Sorrentino of Huntington Asset Advisors.
- For industrial commodities, there’s been a huge amount of capacity added in terms of all metals, said Sorrentino.
- Wagers on declining copper prices increased to a net-short position of 30,036 futures and options, the CFTC data show.
- That’s the most negative outlook since the data begins in 2006.
- Investors are also betting on declines for heating oil, coffee, hogs, sugar, soybean oil, and wheat.
- Fund managers pulled $92 million from commodity funds in the week ended March 27.
- Global funds had an outflow of $23 million.
Take Away #5: The slump in raw materials was “overdone,” said Goldman Sachs Group Inc., raising its outlook for commodities to “overweight” from “neutral”.
Key Facts and Figures:
- The GSCI lost as much as 1.3% this year before erasing declines.
- The Washington-based International Monetary Fund is predicting global growth of 3.5% in 2013, up from 3.2% in 2012.
- “The biggest surprise could be growth begins to accelerate, and oil and metals prices move to the upside,” said Jeffry Currie of commodities research at Goldman.
- “History says you never want to be short commodities during an economic expansion. The risk is more to the upside than to the downside should the economy accelerate,” said Currie.
Take Away #6: Bullish gold wagers fell 14% to 60,126 futures and options in the week to March 26.
Key Facts and Figures:
- The bets are down 41% this year.
- Those for silver fell 77% last week to 632 contracts, the lowest since September 2007.
- Gold will average $1,670 an ounce this year, down from a previous forecast of $1,680,said Michael Widmer of Bank of America Merrill Lynch in London.
- Gold futures for June delivery rose 0.3% to $1,599.80 at 12:28 p.m. on the Comex in New York.
- Holdings in exchange-traded products stood at 2,449.84 metric tons on March 28, 6.9% lower in 2013.
Take Away #7: Crude-oil and natural gas jumped along with a measure of speculative positions across 11 agricultural products.
Key Facts and Figures:
- Crude oil holdings jumped 16% to 199,129 contracts, the biggest gain since Dec. 18.
- The net-long position in natural gas climbed 41% to 65,040 contracts, the highest since the data starts in 2006.
- A measure of speculative positions across 11 agricultural products from wheat to coffee to cattle rose 15% to 306,279 contracts, the highest since Feb. 12.
- Bullish corn bets rose 32% to 192,561, a fourth straight gain and the highest since Dec. 11.
- Soybean wagers jumped 12% to 112,352, the biggest single gain in seven weeks.
- Investors trimmed their outlook for coffee to 28,769 contracts from 30,162 a week earlier.
*To view original article from www.bloomberg.com click here.